Central Government Approves DA Hike to 68% for Employees Effective July 2025
NEW DELHI, OCTOBER 6, 2025 – In a significant move benefiting millions of central government employees, the Ministry of Finance has officially announced the revision of Dearness Allowance (DA) from 65% to 68% of basic pay, effective from July 1, 2025.
Official Notification Details
The Department of Expenditure, Ministry of Finance, issued Office Memorandum No. 1/4(i)/2025-E.II(B) dated October 6, 2025, formally approving the 3% DA hike that will provide substantial financial relief to central government employees amid rising inflation.
Key Highlights of the DA Revision
- New DA Rate: 68% of Basic Pay (increased from 65%)
- Effective Date: July 1, 2025
- Applicability: All Central Government employees
- Arrears: Payable from July 2025 onwards
Important Provisions
According to the official memorandum:
- Basic Pay Definition: Pay drawn in prescribed Level in Pay Matrix as per 7th CPC recommendations
- Exclusions: Does not include special pay or other allowances
- Rounding Off: Fractions of 50 paise and above rounded to next higher rupee
- Status: DA remains distinct element of remuneration, not treated as basic pay
Coverage and Implementation
The revised DA rates will apply to:
- All central government ministries and departments
- Civilian employees paid from Defence Services Estimates
- Indian Audit and Accounts Department (in consultation with C&AG)
- Separate orders for Armed Forces and Railway employees to follow
Impact on Employees
The 3% DA hike will result in:
- Increased monthly take-home salary
- Higher calculation base for other allowances
- Improved purchasing power for employees
- Arrears for July-September 2025 period
Further Information
Employees are advised to refer to the official Office Memorandum available on the Department of Expenditure website for complete details. The implementation is expected to be reflected in the October 2025 salary payments along with due arrears.
The notification marks the regular biannual DA revision that helps government employees cope with increasing cost of living.
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